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Anika Therapeutics reported 4Q18 orthobiologic revenue of $23.8MM, -5.3% vs. 4Q17, with 2018 full year orthobiologic revenue of $93.6MM, -0.2% vs. 2017. The downward trend is expected to continue in 2019, with company revenue guidance given in the range of -3% to -6% below 2018. Leadership deemed 2018 a “snapshot of a company undergoing a transformation,” as Anika transitions from a contract manufacturer to a global company with a hybrid commercial model.
The U.S. viscosupplement market has been particularly challenging due to the regulatory environment as FDA intends to begin treating hyaluronic acid as a drug instead of a medical device, which had been its regulatory status for decades. After meeting with FDA recently, Anika expects that it will need to conduct another Phase III clinical trail to advance its CINGAL product along the approval pathway. Additionally, a Phase III trail conducted by Anika’s commercial partner Mitek Sports Medicine, a division of DePuy Synthes, to expand hip OA indications for MONOVISC was discontinued in 4Q18.
Price pressure has also impacted the orthobiologic market, as the company observed full-year 2018 price decreases in the low to mid double-digits for their ORTHOVISC and MONOVISC products. Price erosion has been significant enough to make Anika’s contractual $5MM annual milestone payment from Mitek Sports Medicine unachievable going forward despite patient volume growth driven by demographic trends.
The company is taking the long view on these developments, with Anika CEO Joseph Darling saying, “While the changes in the regulatory environment present challenges for companies developing HA products, we do believe that such changes may deliver positive benefits for established companies like Anika with extensive product and clinical development capabilities, as they could increase barriers for competing products to reach the market, potentially limit new competition and possibly even stabilize pricing.”
The positive developments for Anika in 2018 include ex-U.S. CINGAL sales growth of 34% vs. 2017, reaching the 50% enrollment mark for the HYALOFAST Phase III trial, and the resumption of production and global shipment of products involved in the voluntary 2Q18 recall (HYALOFAST, HYALOGRAFT-C and HYALOMATRIX). The company believes that the U.S. HYALOFAST market represents a $500MM opportunity, and plans to supplement growth in that market with pipeline products aimed at bone repair therapy (2H19 launch, $250MM to $300MM expected opportunity) and rotator cuff regenerative therapy ($150MM to $200MM opportunity).
Looking ahead, Mr. Darling outlined four areas of focus that will progress Anika through its transformation:
- Develop the hybrid commercial model by restructuring future partnerships with more favorable economics and greater control over market access
- Expand the international orthobiologics franchise through MONOVISC, CINGAL and HYALOFAST
- Advance multiple clinical programs and hire a new Research and Development lead with a focus on sports medicine
- Leverage a strong balance sheet to augment organic growth through smaller tuck-in acquisitions
Segment sales are as follows:
| 4Q18 | 4Q17 | $ Change | % Change | |
| Orthobiologics | $23.8 | $25.1 | -$1.3 | -5.3% |
| FY18 | FY17 | $ Change | % Change | |
| Orthobiologics | $93.6 | $93.8 | -$0.2 | -0.2% |
Sales by geographic area are as follows:
| Geographic Region | 4Q18 | 4Q17 | $ Change | % Change |
| US | $19.5 | $20.58 | -$1.1 | -5.3% |
| Ex-US | $4.3 | $4.5 | -$0.2 | -5.3% |
| Europe | $2.38 | $2.26 | $0.1 | 5.3% |
| Other | $1.90 | $2.26 | -$0.4 | -15.8% |
| Grand Total | $23.8 | $25.1 | -$1.3 | -5.3% |
Net earnings, inclusive of all Anika revenue, are as follows:
| 4Q18 | Amount ($MM) | % of Sales |
| Sales | $27.0 | |
| Cost of Sales | -$7.0 | 26.0% |
| R & D | -$4.0 | 15.0% |
| Selling and Admin | -$6.1 | 22.7% |
| Other | -$2.1 | 7.6% |
| Net Earnings | $7.7 | 28.7% |
Sources: Anika Therapeutics
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
Anika Therapeutics reported 4Q18 orthobiologic revenue of $23.8MM, -5.3% vs. 4Q17, with 2018 full year orthobiologic revenue of $93.6MM, -0.2% vs. 2017. The downward trend is expected to continue in 2019, with company revenue guidance given in the range of -3% to -6% below 2018. Leadership deemed 2018 a “snapshot of a company undergoing a...
Anika Therapeutics reported 4Q18 orthobiologic revenue of $23.8MM, -5.3% vs. 4Q17, with 2018 full year orthobiologic revenue of $93.6MM, -0.2% vs. 2017. The downward trend is expected to continue in 2019, with company revenue guidance given in the range of -3% to -6% below 2018. Leadership deemed 2018 a “snapshot of a company undergoing a transformation,” as Anika transitions from a contract manufacturer to a global company with a hybrid commercial model.
The U.S. viscosupplement market has been particularly challenging due to the regulatory environment as FDA intends to begin treating hyaluronic acid as a drug instead of a medical device, which had been its regulatory status for decades. After meeting with FDA recently, Anika expects that it will need to conduct another Phase III clinical trail to advance its CINGAL product along the approval pathway. Additionally, a Phase III trail conducted by Anika’s commercial partner Mitek Sports Medicine, a division of DePuy Synthes, to expand hip OA indications for MONOVISC was discontinued in 4Q18.
Price pressure has also impacted the orthobiologic market, as the company observed full-year 2018 price decreases in the low to mid double-digits for their ORTHOVISC and MONOVISC products. Price erosion has been significant enough to make Anika’s contractual $5MM annual milestone payment from Mitek Sports Medicine unachievable going forward despite patient volume growth driven by demographic trends.
The company is taking the long view on these developments, with Anika CEO Joseph Darling saying, “While the changes in the regulatory environment present challenges for companies developing HA products, we do believe that such changes may deliver positive benefits for established companies like Anika with extensive product and clinical development capabilities, as they could increase barriers for competing products to reach the market, potentially limit new competition and possibly even stabilize pricing.”
The positive developments for Anika in 2018 include ex-U.S. CINGAL sales growth of 34% vs. 2017, reaching the 50% enrollment mark for the HYALOFAST Phase III trial, and the resumption of production and global shipment of products involved in the voluntary 2Q18 recall (HYALOFAST, HYALOGRAFT-C and HYALOMATRIX). The company believes that the U.S. HYALOFAST market represents a $500MM opportunity, and plans to supplement growth in that market with pipeline products aimed at bone repair therapy (2H19 launch, $250MM to $300MM expected opportunity) and rotator cuff regenerative therapy ($150MM to $200MM opportunity).
Looking ahead, Mr. Darling outlined four areas of focus that will progress Anika through its transformation:
- Develop the hybrid commercial model by restructuring future partnerships with more favorable economics and greater control over market access
- Expand the international orthobiologics franchise through MONOVISC, CINGAL and HYALOFAST
- Advance multiple clinical programs and hire a new Research and Development lead with a focus on sports medicine
- Leverage a strong balance sheet to augment organic growth through smaller tuck-in acquisitions
Segment sales are as follows:
| 4Q18 | 4Q17 | $ Change | % Change | |
| Orthobiologics | $23.8 | $25.1 | -$1.3 | -5.3% |
| FY18 | FY17 | $ Change | % Change | |
| Orthobiologics | $93.6 | $93.8 | -$0.2 | -0.2% |
Sales by geographic area are as follows:
| Geographic Region | 4Q18 | 4Q17 | $ Change | % Change |
| US | $19.5 | $20.58 | -$1.1 | -5.3% |
| Ex-US | $4.3 | $4.5 | -$0.2 | -5.3% |
| Europe | $2.38 | $2.26 | $0.1 | 5.3% |
| Other | $1.90 | $2.26 | -$0.4 | -15.8% |
| Grand Total | $23.8 | $25.1 | -$1.3 | -5.3% |
Net earnings, inclusive of all Anika revenue, are as follows:
| 4Q18 | Amount ($MM) | % of Sales |
| Sales | $27.0 | |
| Cost of Sales | -$7.0 | 26.0% |
| R & D | -$4.0 | 15.0% |
| Selling and Admin | -$6.1 | 22.7% |
| Other | -$2.1 | 7.6% |
| Net Earnings | $7.7 | 28.7% |
Sources: Anika Therapeutics
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
